Speech by SEC Chairman:
Baruch College Commencement

by

Chairman William H. Donaldson

Chairman
U.S. Securities and Exchange Commission

New York, N.Y.
June 1, 2004

Thank you President Regan.

Members of your Board, distinguished guests, proud parents, families and friends, relieved faculty, and last but most certainly not least, members of the great class of 2004. What a wonderful day for everyone assembled here. Allow me to echo a message that I suspect you'll be hearing frequently today, "Lets hear it for the Class of 2004!"

It is a great pleasure and honor to be your commencement speaker, and barring any second thoughts on the part of the degree-granting authorities, a happy moment for me to receive an honorary Baruch degree, along with David Colter and Larry Field. I have the feeling that as you prospective graduates look up in my direction what you are really seeing is the final obstacle remaining between you and your diplomas. That's a heavy burden every commencement speaker must carry - so let me assure you that I do not intend to carry it for long.

Winston Churchill noted that two of life's most difficult tasks are climbing a wall that's leaning toward you, and kissing a girl who is laughing. I would add to that list delivering meaningful commencement thoughts to a graduating class of young men and women, who have no doubt had their collective fill of older generation pontification. I nonetheless view it as a considerable responsibility - though mitigated by the realization that few commencement addresses are exactly etched in one's memory. My own memory of past commencement addresses is, I must confess, a bit clouded. But then my own graduation was in 1953, which I daresay almost counts as prehistoric.

1953 was a year in which IBM introduced its first computer, which was about the size of a large classroom. Mount Everest was also conquered for the first time. And a 25-year-old genetic researcher brought to the scientific world's attention the double helix structure of DNA - modestly noting that such features might be of considerable biological interest.

In 1953, the Dow Jones average closed at 255. Stalin also died that year, ending one of the most brutal regimes of the century. In South Africa, the Parliament voted dictatorial power to its prime minister so he could strengthen apartheid.

At the time of my college graduation, American planes were bombing North Korean dams and flooding the rice fields, attempting to conclude a nasty, bloody war nobody wanted to call by its rightful name. The Korean "conflict" had already claimed the lives of some 25,000 American combat troops, with more than 100,000 wounded, coupled with hundreds of thousands of deaths of Korean civilians, as well as soldiers from China and North and South Korea. This war played out against the backdrop of the Cold War, in which America and other nations heroically struggled to contain the spread of communism.

Twenty-five years later, in 1978, when many of your parents were roughly the same age as most of you are now, America was once again struggling with a number of seemingly insurmountable challenges: a rising inflation rate that would soon reach double digits, a Dow Jones average that was nearly 200 points lower than it had been a decade earlier, and an unstable world that in the year that followed would see the capture of American hostages in Iran as well as a Soviet invasion of Afghanistan.

The world that confronts you today is no less intimidating and challenging, filled with new and emerging threats. While many of the threats come from far away lands, America has also had to contend with homegrown threats to our economic security. The bull markets of the 1990s produced a disturbing pattern of malfeasance, and an erosion of ethical and professional standards, each of which were catalysts for the bursting of the dot-com bubble.

My central point, however, is that no matter how dire the circumstances, America has weathered storm after storm because we have been blessed with leaders who have risen to meet the challenges of their time. Today you represent a new generation upon whom the nation will depend for leadership in a myriad of ways, no matter what career directions evolve for you in the years ahead.

You face this challenge amidst a world of accelerating change, not just in technology and communication but also in rapidly evolving social mores. As you go forward, let me suggest that there are at least three vital personal attitudes - call them mindsets - which if cultivated and nourished will arm you with the power to seize opportunities for leadership and in so doing to help you achieve a personal and professional life marked by fulfillment and happiness.

The first attitude is what I hope will be your approach to education and learning. There is no better preparation for the world you are graduating into than the beginning exercise you've given your intellectual abilities here at Baruch. I say beginning, for to be educated is of course not a destination but a continuing journey. The pace of change demands constant learning to keep up with what's new, but equally important is preserving the lessons of the past. I am reminded of a story - perhaps apocryphal - about a young woman who found herself seated next to Albert Einstein at a dinner party. After a while she turned to Einstein and said, "What do you do?" Einstein replied, "I study physics." After a moment the young woman said "Oh really - I finished that three years ago." Let us hope she was not a Baruch student!

A second attribute, or mindset, which hopefully you will nourish on even the darkest of days, is that of optimism. That optimism will be severely tested as life presents its many challenges, disappointing events, and difficult periods. This sense of optimism is the armor and engine that will allow you to contend with the accelerating change that will be the constant of your future.

That brings me to the third, and in my judgment the most important, attitude that will lead you well in the life ahead. It is a mindset - the spirit and the zest of an entrepreneur.

Entrepreneur for many is a business term, which is associated with starting a company or business venture. I am not talking here about starting a company or running a new business venture, unless that is a choice you will make.

The word "entrepreneur" has its origins in the French language - and loosely translated means "to take on." It is in this sense that I refer to that mindset or attitude that drives one to undertake or take on the challenge at hand. It does not matter if you work alone, are part of a government or business bureaucracy, or toil for a non-profit organization. It does not matter if you are at the top of an organization, in the middle, or at the bottom. It matters not whether you are an individual worker, member of a team, or the assistant to the assistant in a large organization. Whatever the job, role, or function, the true entrepreneur seeks excellence not because of external rules and measures but because of self-imposed internal standards of excellence and integrity. The response inherent in the broader definition of entrepreneur comes from within and is energized by a willingness and desire to question routine and search for the better way. The entrepreneur is willing to assume the risk and responsibility of such internally generated standards. Above all, the entrepreneur tries to make a difference.

Notice I did not say tries to "be different." Being different is easy. Making a difference is not easy at all…but what a zest it brings to life if you will give it a try. It requires an ability to look at whatever tasks lay ahead and to challenge the accepted way of doing things. It requires the wisdom of listening and observing, to protect that portion of existing orthodoxy which is meritorious and deserving of preservation.

The entrepreneurial spirit - broadly defined - has made the difference in our country's economic, social, and political life from the very beginning. It has been the engine of our growth and source of strength as we have taken on the challenges of those different periods when the immediate outlook was troubling and in need of change. It is from this entrepreneurial spirit that leaders have emerged in every sort of endeavor and most often in the darkest hour.

But where do you start and, perhaps most importantly on this particular day, when do you start? For a lucky few of you who know exactly where you are going and what you want to do with this next stage of life, then where and when are easy. But for the great majority of you, I suspect, the prospect of getting started looms as a formidable challenge. And even for those of you who are already started, questions may arise about the wisdom of your choice, perhaps dictated for now by economic or other necessity.

My advice is simple: Start where you are and move forward. I suspect that not too many will be offered the CEO job in a major corporation or embark next week on founding the next Microsoft. Nor will you find yourself in a position to single-handedly influence the problems of our society. In fact the search for gainful employment and simply getting attached to the system will more than likely be exhausting at best, frustrating for sure, and in many instances downright discouraging.

I urge you to draw on that reservoir of optimism I spoke of earlier and apply that entrepreneurial zest as you seek out a beginning role. Be willing to take a chance, to start at a modest level, and recognize that getting going is often your most important step. To paraphrase Edmund Burke's thoughts of a few centuries ago, nobody makes a greater mistake than the one who did nothing, because it appeared that only a little could be done.

If you have that entrepreneurial spirit, I guarantee that you will find, no matter how modest your beginning role, the opportunity to take on the assigned tasks in a way that makes a difference and becomes a beacon for others to follow.

And so I will end where I began by expressing my admiration for the Class of 2004 - as well as my admiration for those who have assisted you along the way: the all-important faculty, of course, but also the mothers and fathers and other members of the family who have lent support in so many ways, to help you get to where you are today. And above all, as you "commence" this next phase of your career, make sure you have some fun along the way.